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Nokia's Elop confident Microsoft deal will succeed [The Seattle Times](Seattle Times (WA) Via Acquire Media NewsEdge) Feb. 15--BARCELONA, Spain -- Since the announcement Friday that Nokia would partner with Microsoft, the mobile industry has been in an uproar over the decision of the world's largest phone maker to go with Windows Phone software on its smartphones. Normally the market behemoth, Microsoft is lagging far behind with its Windows Phone 7, trailing Apple's iPhone and Google's Android. While Nokia's growth has slowed and the company has missed opportunities in advanced smartphones, it remains a giant in the mobile world, selling 124 million devices in the fourth quarter. That's more than 1 million phones sold per day. By comparison, 300,000 Android devices are activated daily. Microsoft and Nokia joined forces after Espoo, Finland-based Nokia hired Stephen Elop, Microsoft's Business division president, to become its chief executive last year. The stock market has not responded well to news of the partnership, driving down Nokia's share price Friday and Monday (though it recovered a bit Tuesday). The partnership will make Windows Phone 7 the primary operating system for Nokia's smartphones. Microsoft will also start using Nokia's mapping and location services in the Bing search engine. Elop sat down for an interview Tuesday at Mobile World Congress to talk about why the move makes sense for Nokia, what it means for tablets and why, even though he's an ex-Microsoft executive, it was not a foregone conclusion to go with Microsoft. This is an edited interview. Q: What about the Nokia culture led you to think this was necessary? A: The Nokia culture is one of great innovation, of leadership work in the mobile environment. That is absolutely the case and will continue. There have been elements of our work that have fallen behind. ... In the area of software we were having some challenges. It was not a challenge in the culture of Nokia, but in execution of software development. Q: A growing software trend is the consumerization of enterprise technology when it comes to devices, an area Microsoft is not strong in. Why did you choose to go with Microsoft over Google, which is strong among consumers? A: As part of our unique relationship with Microsoft, we have the ability to significantly influence and lead elements of the work that will be taken to consumers. We are the No. 1 consumer brand in a number of countries, including China. The consumer is something we bring to the table that we think we can help build in the Windows Phone ecosystem. We ship more phones than any other company on the market. Q: It looks like the reception is pretty negative in the stock market. How do you turn that perception around? A: It comes down to two things. One is we have to remove ambiguity, for example, in terms of how much are we going to reduce operating expenses. It's a question we have not answered deliberately. Also there is ambiguity about what is the first device and ambiguity about managing through the Symbian transition. The way through that, one word -- execution. We have to put the plan through about how we change operating expenses, how we deliver Symbian to consumers while transitioning to Windows Phone. As we demonstrate ability to execute we hope we will be rewarded. Q: You're saying it's uncertainty. It seems like too much certainty about Microsoft's future is weighing that company's stock price down, as opposed to Apple's stock, which is highly valued because of ambiguity surrounding what it will bring to market next. How do you balance the uncertainty that shareholders like and dislike? A: When there's uncertainty about a plan and impact it's going to have on employees and market share, uncertainty is something that scares investors. However, we had to make a bold decision in terms of our smartphone strategy, given how rapidly the market is changing. The way I would characterize the reaction of investors, even employees, is the strategy of making that bold step is being very well received. That includes many of investors I've spoken to. Q: Does this exclusive relationship apply to tablets you have planned? A: There's no exclusivity. We will do work in different segments of the market with different platforms. There's no exclusivity either way. Microsoft will continue to work with other OEMs [phone makers]. The relationship with Microsoft did not encompass tablet specifics, but it creates an interesting opportunity. We could -- and it has not been decided -- we could introduce a Windows tablet; we could do tablets either internally and choose to do something else. Q: Could that include Android? A: It could. Q: You were asked earlier whether you were a Trojan horse for Microsoft at Nokia and you said no. So what was your role? A: I see my role as leader of a company who had the choice to make between three choices: go it alone with Meego, Droid and Microsoft. I drew together an internal group from management and advisers, ultimately ending up in a unanimous decision of the management team and the board that made the decision. Q: Anything else you want to say to Redmond? A: I think the really exciting point is we have created a three-horse race with Apple, Android and now the Windows ecosystem. Together we're going to build just a great opportunity going forward. And it snows as much in Helsinki as it rains in Seattle. Sharon Pian Chan: 206-464-2958 or [email protected] To see more of The Seattle Times, or to subscribe to the newspaper, go to http://www.seattletimes.com. Copyright (c) 2011, The Seattle Times Distributed by McClatchy-Tribune Information Services. 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